Agribusiness and Trade: India's tech boom offers opportunities for New Zealand businesses
While it sells professional services like law and accounting, India remains best known for its information technology services. Its tech giants like Tata Consultancy Services, Infosys and Tech Mahindra may not be household names, but are familiar in executive suites and boardrooms.
India's tech firms are active in New Zealand. In April, Spark signed a strategic deal with Infosys to accelerate the transformation of its technology delivery model using artificial intelligence and cloud tools.
This year Air New Zealand and Tata Consultancy Services signed a five-year partnership deal to explore opportunities for digital transformation, innovation and operational efficiency in the airline industry.
Tech Mahindra is working with the University of Auckland on AI and quantum computing projects. This last deal underlines a key point. Twenty years ago India was best known for its sweatshop call centres and low-cost IT outsourcing. Today it is a global hub for advanced technology, innovation and skilled digital talent.
In 2020, India accounted for approximately 55% of the global IT service sourcing market — valued at between US$200 billion and $250b. It made up around 20% of total global IT spending. That was up from around 13% of the total in 2015.
India also accounts for a large slice of the world's IT experts. In 2021, India ranked third worldwide for cloud expertise, with 608,000 professionals.
In addition to exports, India sustains a huge domestic technology sector. In 2023 the industry had an estimated worth of US$245b and employed 5.4 million people. The market is growing at just over 10% a year.
Speaking at the India New Zealand Business Council's Boardroom to Border leadership dialogue in May, Prime Minister Christopher Luxon identified technology as one of the key focus areas of his mission to India in March.
Said Luxon: 'We worked really hard in Mumbai and Delhi to ensure that New Zealand's primary products, our technology, our education, exports and our tourism offerings, were front and centre.
'Kiwi and Indian businesses are the engines of growth creating those new opportunities, lifting trade and helping transform the relationship between our countries.'
Selling New Zealand technology faces challenges.
Sakthi Ranganathan, founder of Christchurch-based JIX Reality Lab told attendees at the Boardroom to Border event that it's hard to attract the world's best researchers to work in New Zealand. 'From an Indian perspective, New Zealand is not seen as a destination for cutting-edge research. It's not the place to be for the future of aerospace or food and agriculture. The cream, the high-achieving individuals will always prefer a different country to New Zealand.'
Another aspect of India's rise as a technology powerhouse lies in its consumption of technology. With a population of 1.4b and a rapidly-growing middle class, it represents a huge market for products such as mobile phones and laptops. These are also essential tools for lifting Indians out of poverty.
India's telecom industry is the second largest by mobile phone, smartphone and internet users after China. Figures from the GSM Association and Boston Consulting Group show there are 1.165b wireless subscribers and a total of 1.2b telephone subscribers.
Which explains why Apple is showing so much interest in India. The US phone and computer maker is putting down roots there. It now manufactures iPhones in new factories outside Chennai.
Today between 15% and 18% of all iPhones are produced in India. Five years ago, 100% were made in China. That country now accounts for 75%. The Times of India forecasts the nation will account for 25% to 30% of iPhones by 2027.
American geopolitical tension with China and President Donald Trump's mercurial trade policies go some way to explaining the move, but the lure of a billion consumers moving out of poverty is significant. And the potential spotted by Apple also represents an export opportunity for New Zealand's tech sector.
Madras-born, Auckland-based angel investor and education consultant Edwin Paul chaired a panel at Boardroom to Border exploring moves to build a shared digital future between New Zealand and India. He neatly summarises the potential.
'Both countries bring unique strengths to the table. India brings scale and a digital public infrastructure. New Zealand brings trust-based governance, regulatory agility and a people-first innovation approach. Together, we are well placed to shape a digital agenda that is not only competitive but ethical, inclusive and resilient.'
Paul's agenda includes building 'future-ready frameworks in artificial intelligence, cyber security, digital services and the startup ecosystem, moving beyond pilot projects and policy papers'. He wants to see mechanisms put in place to make cross-border innovation work.'
Investment is crucial to India's rise and the technology sector is set to receive the bulk of funds. Most Indian investors say they plan to allocate more than three-quarters of their funds to digital investments in the next five to seven years.
Bharat Chawla, the chairman of the India New Zealand Business Council put investment into a local perspective when reporting back on the INZBC's Grow with India report. He talked about the diplomatic investment the two countries have made and work across public and private sectors. He sees the need for two-way investment between the two countries.
Two New Zealand companies that have made major investments in India are Carmen Vicelich's Valocity and Serko, a publicly traded travel and expense technology company.
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